Russian Lawmakers Give First Nod to Crackdown on Casinos

On Thursday, Nov.16, the State Duma, lower house of the Russian parliament, gave unanimous approval to the bill that would effectively ban gambling in Russia, except in four special zones, from 2009. The legislation, however, is expected to undergo fairly drastic changes before it passes a second reading, probably later this year.

“There is no doubt the bill will change beyond recognition,” Yevgeny Kovtun, a spokesman for the Gaming Business Association, told the Moscow Times.

The bill, submitted by President Putin last month, got through its first reading by a vote of 440-0, with one abstention.

Under the bill, small slot-machine halls and casinos will be closed next July, when a minimum gambling age of 18 and other restrictions come into effect.

Duma deputies also stated that the legislation must clarify how the four gambling zones would be set up, as the current version of the bill does not make clear how many of the zones would be established inside residential areas.

Crucially, it also fails to set out a process for creating the zones, although it is known that five-year licenses would be granted for operation inside the zones.

The exact locations of the four zones have not been chosen as yet, but Duma speaker Boris Gryzlov said two zones will be in European Russia, one in Siberia and one in the Far East. The first zone will be created in July 2007.

Moscow does not plan to apply for the status of a gambling zone, according to Moscow’s deputy mayor, Iosif Ordzhonikidze, which spells the end for the 537 gaming establishments licensed to operate in the city.

Many think that the new laws will see the $ 5 billion-a-year gambling industry shrink by as much as 70 percent.

Under the new measures, slot-machine halls smaller than 100 square meters and casinos smaller than 800 square meters would be forced to close.

The issue is thought to be closely linked to the Duma elections, scheduled for December next year, and the presidential vote, scheduled for 2008. Gambling is seen as an easy vote-winner by some politicians.

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